MIRA INFORM REPORT

 

 

Report Date :

10.09.2007

 

IDENTIFICATION DETAILS

 

Name :

DEMOSHA CHEMICALS PRIVATE LIMITED

 

 

Registered Office :

105-A, Mittal Towers, 210, Nariman Point, Mumbai – 400 021, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

27.10.1970

 

 

Com. Reg. No.:

14859

 

 

CIN No.:

[Company Identification No.]

U24110MH1970PTC014859

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMD09824D

 

 

PAN No.:

[Permanent Account No.]

AAACD3822A

 

 

Legal Form :

A Closely held Public Limited Liability Company.

 

 

Line of Business :

Manufacturing and Sale of Sodium Hydrosulphite, Sodium Formaldehyde Sulphoxylate, Zinc Oxide, etc.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 202908

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well-established and reputed company having satisfactory track records.  Directors are reported as experienced and respectable businessmen.  Trade relations are reported as fair.  Business is active. Payments are usually correct and as per commitments.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

 

LOCATIONS

 

Registered Office /

Administrative Office :

105-A, Mittal Towers, 210, Nariman Point, Mumbai – 400 021, Maharashtra, India

Tel. No.:

91-22-282 3588 / 22852189 / 287 2218

Fax No.:

91-22-204 5997

E-Mail :

www.info@demoshachemicals.com / demosha@vsnl.com

Website :

http://www.dubindia.com/ft/del/home1008.htm

 

 

Plant : 82:

GIDC Industrial Area, Post Gundlav, Valsad – 396035, Gujarat, India

Tel. No.:

91-2632-237271 / 2 / 3

Fax No.:

91-2632-237277

E-Mail :

www.plant@demoshachemicals.com

 

 

Factory 1:

Ř            82, GIDC Industrial Estate, Gundlav 396 005, Gujarat, India

Tel. No.    91-2632-82 20474

Fax No.    91-2632-82 20657

Factory 2:

Ř            132-136, GIDC Industrial Area, Post – Gundlav, District Bulsar, Gujarat, India

 

 

DIRECTORS

 

Name :

Mr. Pradip H. Khimani

Designation :

Director

 

 

Name :

Mr. Gautam Bhogilal Shah

Designation :

Director

Address :

Panchasar, 76 Netaji Subhash Marg, Mumbai - 400 020, Maharashtra

Date of Birth/Age :

08.01.1946

Date of Appointment :

01.03.1995

 

 

Name :

Mr. Vijay Parikh

Designation :

Director

Address :

39, Everest, 12  Peddar Road, Mumbai – 400 026, Maharashtra

Date of Birth/Age :

09.09.1955

Date of Appointment :

01.03.1995

 

 

Name :

Mr. Chinubhai Shah

Designation :

Director

Address :

903, Chandanbala,  R. R. Thakkar Marg, Mumbai –  400 006, Maharashtra

Date of Birth/Age :

13.12.1937

Date of Appointment :

01.05.1997

 

 

KEY EXECUTIVES

 

Name :

Mr. Gautam B Shah

Designation :

Chief Executive officer

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders

 

No. of Shares

Mr. Monish Shankerlal Parikh

 

4803

Mr. Mahendra Shah

 

10

Mr. Jayantilal S Shah

 

4410

Mr. Chinubhai S Shah

 

3816

Mr. Gautam B Shah

 

10692

Mrs. Chandrakanta B Shah

 

1200

Mr. Ajay M Parikh

 

3900

Mr. Vijay Parikh

 

4584

Mrs. Geeta G Shah

 

9750

Mr. Nilay G Shah

 

10650

Mr. Gautam B Shah ( HUF)

 

5250

Mr. Bhogilal Manilal Shah (HUF)

 

5350

M/s. Product and Produce

 

240

Mrs. Sheelaben C Shah

 

2250

Mrs. Pushpa I Mehta

 

2000

Mr. Monish Shankerlal Parikh ( HUF)

 

4241

Mrs. Indumati Monish Parikh

 

3300

Mrs. Heena V Parikh

 

3950

Ms. Sonal T Bhuta

 

1000

Miss. Isha V Parikh

 

1300

Mr. Kamlesh M Shah

 

4156

Mr. Sunil M Shah

 

4156

Mrs. Bharatiben J Shah

 

3476

Mr. Alay J Shah

 

3100

Mr. Ashish C Shah

 

4650

Master Rikhav V Parikh

 

1300

Mrs. Kanchanben K Parikh

 

325

Mrs. Ramaben Kapadi

 

325

Mrs. Niruben Parikh

 

325

Mrs. Ilaben Kothari

 

325

Mrs. Bakufa Bhatt

 

325

Mrs. Harshita Parikh

 

1200

Miss Vama G Shah

 

9000

Mr. Vijay Parikh ( HUF0

 

1215

Master Hardik Parikh

 

1875

Mr. Ajay Parikh

 

3500

Mr. Gautam Dey

 

15

Mrs. Ruma Rudra

 

15

Miss Jhanvi A Parikh

 

1875

Miss Nipa M Shah

 

600

Miss Ami C Shah

 

607

Mr. Jiten J Shah

 

3000

Mr. Kamlesh M Shah ( HUF)

 

450

Mr. Sunil M Shah ( HUF)

 

450

Miss Shikha S Shah

 

1395

Miss Shreya S Shah

 

1395

Mudrika Finance and Investments Private Limited

 

3451

Master Karan K Shah

 

1290

Master Dremal K Shah

 

1287

Mr. Nilay G Shah ( HUF)

 

600

Master Manav N Shah

 

1500

Mrs. Nehal N Shah

 

1500

Mr. Chinubhai S Shah (HUF)

 

2450

Mr. Jayantilal S Shah ( HUF)

 

67

Miss Sneha Shah

 

160

Miss Nidhi Shah

 

160

 

Equity Share Break – up (Percentage of Total Equity):

 

Sr. No.

Category

Percentage

1

Directors or relatives of directors

97.44

2

Bodies Corporate

2.56

 

Total

100.00

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Sale of Sodium Hydrosulphite, Sodium Formaldehyde Sulphoxylate, Zinc Oxide, etc.

 

 

Products :
  • Sodium Hydrosulphite
  • Zinc Oxide
  • Zinc Oxide Feed Grade
  • Sodium Formaldehyde Sulphoxylate
  • Zinc Formaldehyde Sulphoxylate
  • Zinc Sulphate Mono Hydrate
  • Zinc Sulphate Hepta Hydrate

 

 

 

GENERAL INFORMATION

 

 

 

No. of Employees :

250

 

 

Bankers :

Bank of Baroda, Bulsar Main Branch, Bulsar.

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

R P Shah and Company

Chartered Accountants

Address :

Office No.35, 3rd Floor, Tardeo, AC Market, Mumbai - 400 034, Maharashtra

 

 

Associates/Subsidiaries :

Nil

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

300000

 Equity Shares

Rs.10/-each

Rs.3.000 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

144000

Equity shares

Rs.10/- each

Rs.1.440 millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

 

31.03.2006

31.03.2005

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

 

14.400

14.400

2] Share Application Money

 

0.000

0.000

3] Reserves & Surplus

 

36.327

31.525

4] (Accumulated Losses)

 

0.000

0.000

NETWORTH

 

50.727

45.925

LOAN FUNDS

 

 

 

1] Secured Loans

 

132.528

102.433

2] Unsecured Loans

 

98.601

79.817

TOTAL BORROWING

 

231.129

182.250

DEFERRED TAX LIABILITIES

 

0.000

0.000

 

 

 

 

TOTAL

 

281.856

228.175

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

 

54.687

59.205

Capital work-in-progress

 

15.880

10.710

 

 

 

 

INVESTMENT

 

0.050

0.051

DEFERREX TAX ASSETS

 

3.493

2.941

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
 

89.502

90.045

 

Sundry Debtors
 

246.336

165.929

 

Cash & Bank Balances
 

10.097

10.216

 

Other Current Assets
 

1.370

1.509

 

Loans & Advances
 

6.885

5.607

Total Current Assets
 

354.190

273.306

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
 

145.530

117.394

 

Provisions
 

0.914

0.644

Total Current Liabilities
 

146.444

118.038

Net Current Assets
 

207.746

155.268

 

 

 

 

MISCELLANEOUS EXPENSES

 

0.000

0.000

 

 

 

 

TOTAL

 

281.856

228.175

 

 

 

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

 

31.03.2006

31.03.2005

Sales Turnover

 

772.442

574.669

Total Income

 

772.442

574.669

 

 

 

 

Profit/(Loss) Before Tax

 

54.099

(34.460)

Provision for Taxation

 

0.000

0.000

Profit/(Loss) After Tax

 

54.099

(34.460)

 

 

 

 

Earnings in Foreign Currency :

 

 

 

Total Earnings

 

75.174

0.480

 

 

 

 

Expenditures :

 

 

 

 

Interest

 

24.093

20.067

 

Depreciation & Amortization

 

5.903

5.589

 

Other Expenditure

 

688.347

583.473

Total Expenditure

 

718.343

609.129

 

 

KEY RATIOS

 

PARTICULARS

 

 

 

31.03.2006

31.03.2005

PAT / Total Income

(%)
 

7.00

(5.99)

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
 

7.00

(5.99)

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
 

13.23

(10.36)

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
 

1.06

(0.75)

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
 

428.300

6.53

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
 

2.41

2.31

 

 

 

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

        

Fixed Assets:

 

Ř       Land

Ř       Building

Ř       Plant and Machinery

Ř       Equipments, Electric Installation

Ř       Furniture and Fixtures 

Ř       Vehicle

 

 

Name of the company

DEMOSHA CHEMICALS PRIVATE  LIMITED

Presented By

Mr. Vijay M Parikh, Director

1) Date and description of instrument creating the change

25th October 1999 Memorandum of Entry for Equitable Mortgage made by the company in favour of BanK of Baroda

2) Amount secured by the charge/amount owing on the securities of charge

Working Capital Facilities Rs.121.000 millions Bank of Baroda has agreed to grant and/or to continue to grant banking facilities or accodomodation to the borrower by way of.

Fund based

Rs. in millions

Cash Credit Hypothecation of Stock

30.000

Cash Credit Hypothecation of Book debts

51.000

Packing Credit

7.500

FBP/UFBP

7.500

Non Fund Based

 

In.and/Foreign/L/C

(DP/DA on 90days Usance)

20.000

Guarantee

5.000

and the repayment of all monies including principal sums, interest, interest tax, additional interest, further interest, penal interest, commission, costs, charge, and expenses etc. payable under or in respect of such facilities have been secured / agreed to be secured by various agreements and documents executed by the Company from time to time in favour of the Bank.

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

The above amount be secured by way of mortgage by deposit of the title deeds documents writings by constructive delivery as listed out in part A and B of the first Schedule hereunder written

4) Gist of the terms and conditions and extent and operation of the charge.

The company delivered to and deposited with the title deed documents writings ( hereinafter referred to as the said title deeds by constructive delivery as listed out in part A and Part B of the First Schedule hereunder written with the Bank for the purpose with the intent to create a security thereof by way of mortgage by deposit of title deeds for securing various credit facilities financial assistance and accommodation granted and provided by the bank to the company aggregating to Rs.121.000 millions as under:

Fund based

Rs. in millions

Cash Credit Hypothecation of Stock

30.000

Cash Credit Hypothecation of Book debts

51.000

Packing Credit

7.500

FBP/UFBP

7.500

Non Fund Based

 

In.and/Foreign/L/C

(DP/DA on 90days Usance)

20.000

Guarantee

5.000

Together with agreed rate of interest, penal interest, additional interest, liquidated damages, prima, costs charges, expenses and all monies due by the company to the Bank in respect of the aforesaid credit facilities.

5) Name and Address and description of the person entitled to the charge.

Bank of Baroda , Bulsar Main Branch, Bulsar

6) Date  and brief description of instrument modifying the charge

1st Modification

Supplement Memorandum of Deposit of title Deeds executed on 14th December 2001 by Demosha Chemicals Private Limited in favour of Bank of Baroda, Bulsar Main Branch Bulsar for extension of equitable Mortgage to secure limits. 

 

2nd Modification

Supplement Memorandum of entry dated 22nd June 2004 by Demosha Chemicals Private Limited in favour of Bank of Baroda, Bulsar Main Branch, Bulsar for extension of Equitable Mortgage to secure limits.

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

1st Modification

Bank of Baroda shall also secured for the increase of credit facilities of Rs.32.000 millions i.e. total Rs. 153.000 millions as follows:

Fund based

Rs. in millions

Cash Credit Hypothecation of Stock

35.000

Cash Credit Hypothecation of Book debts

55.000

Packing Credit

9.000

FBP/UFBP

9.000

Non Fund Based

 

In.and/Foreign/L/C

(DP/DA on 90days Usance)

40.000

Guarantee

5.000

together with agreed rate of interest, penal interest additional interest, liquidated damages, prima, costs charges, expenses and all monies due by the company to the Bank in respect of the aforesaid credit facilities.

 

2nd Modification

Bank of Baroda shall also be secured for the increase of credit facilities of R.12.000 millions i.e. total Rs.165.000 millions as follows:

Fund based

Rs. in millions

Cash Credit Hypothecation of Stock

40.000

Cash Credit Hypothecation of Book debts

 

60.000

(Sub Limit with Banks Nariman Point Branch, Mumbai)

(10.000)

Packing Credit

10.000

FBP/UFBP

10.000

Non Fund Based

 

In.and/Foreign/L/C

(DP/DA on 90days Usance)

40.000

Guarantee

5.000

 

 

Total

165.000

together with agreed rate of interest, penal interest additional interest, liquidated damages, prima, costs charges, expenses and all monies due by the company to the Bank in respect of the aforesaid credit facilities.

 

 

WEBSITE DETAILS:

 

Right from its conception in 1971 subject has started its manufacturing activities at its plant at Gundlav, Valsad, India which is situated some 200 K. M. North of Mumbai city. Today they are one of the reputed and known manufacturer of a few Inorganic Chemicals like Hydrosulphite, Sulphoxylate, and zinc based compounds. They have 30 workers in various departments of the plant including Research and Development and Quantity Control Lab. Further, their Corporate Office is located at Mumbai where some 50 qualified staff members are operating in various departments like procurement, marketing, export, finance, technical development etc.

 

Company is managed by three fulltime directors and qualified professional executives. Managing Director is having technical background with Master of Science degree in Chemical Engineering from University of California, Berkeley and has wide experience of 30 years in chemical industry.

 

Company is part of a group having total Sales of more than Rs. One Billion in chemicals only. Chemicals are being manufactured at four different locations and are widely used in pharmaceutical, textile, rubber, cattle feed, sugar, paper, ceramics, dye, food and Agriculture, etc.

 

subject has made remarkable progress over the years in enlarging its sales volume and introducing number of new products. What began as a small manufacturing unit in Sodium Hydrosulphite with a total installed capacity of 400 mt per annum in 1971 has growth to the total installed capacity of more than 25000 mt of all the products as on 1998.

 

 

 

Export

 


Export activity is gathering fast momentum and they are exporting to Europe, Latin America, Canada, U.S.A., Australia, South East Asia, Middle East, South Africa among others. Their experience at subject on Export Front has convinced them that the only way to create the trust and confidence in their customers is by maintaining rigid quality control, competitive pricing and committed and prompt delivery schedule. All efforts are being made to persue these objectives by each department.


Through their consolidated efforts of all departments they have achieved excellent growth in Exports turn-over year after year. To serve their customers better, they are trying to create a network of Agents and Depots all over the world. This way they feel that their clients will get faster deliveries without maintaining big inventories at their factories.

They exports their products with proper care in transit worthy containers and in the manner to honour each and every regulation prescirbed by the Global Authority for the shipment of hazardous cargo.

Environmental Protection and Safe Operations:

They produce chemicals, however complicated, with due respect to their environment. They have invested substantially in Effluent Treatment Plant and in Air Pollution Prevention Equipments to ensure that natural resources used by them are properly cleaned before their discharge.

They do produce and also use hazardous chemicals which if not handled properly can cause extensive damage to the society at large. They must have handled millions of pounds of chemicals without any significant mishape. Although they have proven record of safe operations for last 25 years, they are not at all complacent when it comes to the safety of their employee or the people around the world.

 

Product

Annual Capacity MT

SODIUM HYDROSULPHITE (ZINC PROCESS)

7000

SODIUM FORMALDEHYDE SULPHOXYLATE

4000

SODIUM FORMALDEHYDE BISULPHITE

1000

ZINC FORMALDEHYDE SULPHOXYLATE

1000

ZINC OXIDE
   (a) RUBBER-CERAMIC
   (b) CATTLE FEED

 

 

5000

ZINC SULPHATE
   (a) MONOHYDRATE
   (b) HEPTAHYDRATE

 

 

3000

 

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.40.71

UK Pound

1

Rs.82.26

Euro

1

Rs.55.66

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

4

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

5

--CREDIT LINES

1~10

5

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

NO

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

45

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions